Israeli motorists -- at least those who drive buses and garbage trucks -- will be able to benefit directly from the country’s vast reserves of natural gas starting next year, when Delek Natural Gas opens the country’s first filling station offering compressed natural gas (CNG).

The company, a unit of Yitzhak Tshuva’s Delek Group, which owns stakes in the offshore Tamar and Leviathan gas fields, last week showed off a CNG dispenser it will be using to fill tanks.

Guy Silberman, Delek Natural Gas’ CEO, said the company will open its first CNG fueling station in Tzrifin in the second half of 2014. By 2025, there will be 150 public natural gas fueling stations across the country, he predicted.

Made by compressing natural gas, CNG is cheaper than gasoline, releases fewer undesirable fumes into the air and is safer than other fuels in the event of a spill, because it is lighter than air and dissipates into the air. However, because it requires special, costly fuel tanks, municipalities and operators of truck fleets are the main users, at least for now. Some 16 million vehicles are powered by natural gas around the world, with the number growing 23% a year on average over the last decade.

“Using natural gas for transportation is the only solution that is both immediately available and is very low cost to realize the government’s goal of reducing our reliance on crude oil,” said Avi Ben Assayag, CEO of Delek The Israel Fuel Corporation, Delek Natural Gas’ parent company. “In Israel, the price of filling up with natural gas will probably be half of that for gasoline or diesel fuel.”

Israel’s vast natural gas reserves have so far been dedicated to powering electrical plants rather than to developing other uses, partly because the demand in an economy as small as Israel’s limits the number of areas where it can be used economically.

In transportation, Israel has focused on CNG where it can be used to power vehicles that operate in a limited geographic area, like buses and garbage trucks.

Eyal Rosner, the head of the Alternative Fuels Initiative in the Prime Minister’s Office, said the cost of liquefied natural gas, an alterative fuel for transportation, was so high that it could only be justified by long-haul journeys in the thousands of kilometers. In tiny Israel, the only possible market is for trucks plying the route from Haifa to Eilat. “The advantage in using LNG is when distance comes into play,” he said. “Consequently, for most players in Israel’s transportation market, it simply isn’t worthwhile.”

Nevertheless, two or three entrepreneurs are examining the possibility of setting up two or three LNG fueling stations along the route, according to Rosner. He pointed to a venture by the U.S. entrepreneur T. Boone Pickens, who has built a network of LNG filling stations along key trucking route in the United States.

Filling up with compressed natural gas in the United States. Credit: Bloomberg